S.C. Senate debates compromises on $6B spending plan

COLUMBIA - A $6 billion spending plan that cuts Medicaid spending while giving businesses a big tax break could be on Gov. Nikki Haley's desk by the end of the week.

The House on Wednesday voted 57-54 to approve the spending and then agreed 76-37 to a bill authorizing $110 million in spending from a reserve account. The Senate began debating the budget compromise Wednesday.

The spending plan locks in Medicaid program cuts at the Department of Health and Human Services. The agency earlier this year eliminated or reduced a variety of Medicaid services, including adult dental and vision services, the number of shoes diabetics can receive and home health care visits.

Meanwhile, it calls for cutting $125 million from reimbursements to doctors, hospitals and other caregivers for the state's poor, disabled and elderly. Hospitals have warned the reductions will force some to cut staff, although the state Medicaid agency doubts that will happen.

The spending plan also locks in cuts implemented earlier this year at the Department of Social Services. For instance, in February the department cut welfare-to-work payments for an average mother of two from $270 monthly to $216. Those payments already were among the nation's lowest.

The spending plan was sweetened last month by $210 million as state tax collections increased faster than expected.

Businesses that saw their unemployment tax assessments rise after they fired workers would get a $146 million chunk of that cash in a bailout. The increased assessments stem from the state repaying federal loans needed to pay jobless benefits. The state's unemployment trust fund went broke in 2009 after years of low employer assessments that left it unable to weather the recession.

The compromise spending plan also puts $56 million of the extra revenue into public schools. It will raise the state's per-student spending to $1,880 from the current $1,615. That's still well short of the $2,720 a state school funding formula says is required.

Meanwhile, the spending plan mostly follows a directive from Haley that taxpayer money no longer be used to run South Carolina Educational Television, but with some fiscal sleight of hand. SCETV won't receive a direct taxpayer appropriation like the $9.6 million it has in the current budget. Instead SCETV will bill other state agencies for the work it does for them and will be allowed to keep fees it generates from other sources, including broadband leases.

Rep. Gilda Cobb-Hunter questioned where agencies will get the money for the fees.

House Ways and Means Committee Chairman Dan Cooper expects state programs may add those expenses to student fees. For instance, the state Criminal Justice Academy may have to bill students "like you do at a technical school or college or anywhere else you do an online class," said Cooper, R-Piedmont. School districts, likewise, should be able to cover those costs because they're getting more money, Cooper said.

That still could leave SCETV without money, said Cobb-Hunter, D-Orangeburg. "I'm concerned about what's going to happen when these agencies get a bill from ETV and they don't have the money to pay the bill," she said.

The alternative, Cooper said, would be to use taxpayer money directly for the agency, as the Senate wanted, and run the risk of a veto. If the House didn't override the veto, he said, ETV would have no funding.

Haley also wanted an end to taxpayer funding for the state Arts Commission. That didn't happen. Instead, the proposed budget restricts how the commission's state money can be spent. It requires the commission use 70 percent of the nearly $2 million it gets for grants. Cooper said the change still faces a veto threat and could bring job cuts at the commission.

Cooper also defended more than $2.3 million added to the House's operating budget. He said $1.3 million is for legislators' salaries that were cut when the House failed to override a veto last year. And $1 million is used to cover expenses related to redrawing political district lines, another item vetoed last year.

Orangeburg Democratic Sen. Brad Hutto questioned that spending while the state is making reductions in health care programs.

Most South Carolina public colleges stand to lose 6 percent of their general taxpayer budget. That includes more than $6 million at the University of South Carolina and nearly $4 million at Clemson University. The reductions were softened to a degree with $110 million from a state reserve account paying for maintenance projects. For instance, USC picked up $9 million and Clemson gained $6 million.

The reserve account money also gives the state Department of Commerce $10 million to close economic development deals, the state's technical college system $13 million for worker training and $3.5 million to state law enforcement agencies for new equipment.